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Re: Two people....what do you spend?
Old 03-23-2007, 07:11 PM   #41
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Re: Two people....what do you spend?

From quickly browsing this thread I picked up a few times that people viewed their start year in social security as a special event that might let them spend a little more. If I've got that observation right then I think you should just run Firecalc with those income streams added and allow yourself to spend more earlier.

As an example, I retired in 2003 which happened to be the low point of the last recession. Our spending percentage at that time was about 5.5%. With the good stock markets we've had since 2003, our spending percentage (with spending adjusted each year for inflation) has dropped to 4.2% because we are about 22% above our 2003 total (corrected for inflation). The original 5.5% in 2003 was chosen because FireCalc showed this was reasonable with our future SS income included. Also it was chosen because we could breath and have fun . We won't be increasing our spending percentage any time soon as the equity markets could hit the skids any time.

Regarding tracking spending, I just enter each month's totals in a home brewed spread sheet, one worksheet per year. I don't bother with the categories. Just put down all the Visa totals with breakouts in red for major items like a new plasma TV . The checks are entered separately. Here are some major expenses which weren't planned: new roof, new Honda CRV (1994 Toyota went to our son), duct rework under the house, helping son out with his education bills and living expenses once he got his act together :P. Another unplanned item, I won a trip to Paris (airfare only), so now we have the full trip planned and it will cost a bundle but I'm not complaining :.

Au revoir,
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Re: Two people....what do you spend?
Old 03-23-2007, 10:47 PM   #42
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Re: Two people....what do you spend?

Here is something that seems to be getting missed - car 'payments'. It is easy to overlook this in the budget if your car is paid for. At some point, you will be replacing the old one. I suggest annualized that expense. For example, if you expect to spend $25K out of pocket every ten years, that means you are 'spending' an average of $2500/year - but you won't see it in your statement (unless you bought a car that year). Plug in your own $ and years and number of vehicles. I just figure the gains will be roughly equal to car price inflation.

A few people have said this but is seems to be going unheard: It doesn't really matter what other people spend -what is important to you is what you spend. Comparing to others is a good exercise to assure you are not missing something, but use your own numbers.

Look at your present total outflow. I just look at the 'total withdraw' number on my monthly checking account, do that for any account that money comes out of. Adjust for any that is not really 'spent' (transfered to a savings account for example). Then adjust for any differences you anticipate in retirement (as mentioned many times - health insurance!).

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Re: Two people....what do you spend?
Old 03-23-2007, 11:15 PM   #43
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Re: Two people....what do you spend?

I would like to retire in 18 months....trying to convince DH that we should be tracking expenses to prepare. We have a general idea, but reading through the posts proves that we need to get a more detailed view. Thanks for sharing!!!
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Re: Two people....what do you spend?
Old 03-24-2007, 07:37 AM   #44
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Re: Two people....what do you spend?

Quote:
Originally Posted by Dog
I would like to retire in 18 months....trying to convince DH that we should be tracking expenses to prepare. We have a general idea, but reading through the posts proves that we need to get a more detailed view. Thanks for sharing!!!
I ran the numbers so many times my co workers thought I was nuts. However it seems that since I Erd and moved from NJ to NC man am I spending less.

My natural gas, electricity and water, sewer and trash, car insurance and even homeowners is 30% lower. No commuting costs really to speak of now. That 120 mile roundtrip is over so less gasoline.

Then being able to cash out of that ridiculus mortgage of 225,000 and be in a nicer home down here with owning 88% equity in it already is just Kool!
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Re: Two people....what do you spend?
Old 03-24-2007, 06:27 PM   #45
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Re: Two people....what do you spend?

paid for house no other debt. company health plan.

DH still works to keep health care which he will carry into his retirement in two years. We have tracked for several years.

Taxes, food, utilities, insurance etc. the real basics around $24,000 a year, bare bones not including cable or any entertainment or gym and never eating out, one car driving to the library or grocery store occasionally.
Costs are helped by a big garden and I cook everything from scratch and neither of us are fashion plates. Work costs from DH commute (his work supplies his uniforms and shoes) add several thousand dollars that won't carry over into retirement.

Add luxuries like cable, travel, wood working, entertainment expenses, occasional new computer or other gadget, owning pets, second car and crafting hobbies and we are closer to $40,000. As times goes on, we will have expenses of a new roof, auto replacement etc so I feel comfortable Mid $40's minimum for the lifestyle we want.
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Re: Two people....what do you spend?
Old 03-24-2007, 09:37 PM   #46
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Re: Two people....what do you spend?

Quote:
Originally Posted by savedapile
I feel comfortable Mid $40's minimum for the lifestyle we want.
Sounds like if you were paying for medical insurance and housing, this would translate to mid $60's minimum.
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Re: Two people....what do you spend?
Old 03-24-2007, 11:09 PM   #47
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Re: Two people....what do you spend?

The numbers reported in this thread are noticeably lower than the numbers reported in the "How much did you spend last year" thread:

http://early-retirement.org/forums/i...?topic=11335.0

I wonder if people are leaving lumpy expenses out of the numbers they report here, or if this thread somehow attracts more frugal folks.
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Re: Two people....what do you spend?
Old 03-25-2007, 02:16 AM   #48
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Re: Two people....what do you spend?

Just did the budget, and mid 40s sounds right here as well. 2 of us, no kids, renting an apartment in nyc.
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Re: Two people....what do you spend?
Old 03-25-2007, 03:41 AM   #49
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Re: Two people....what do you spend?

Quote:
Originally Posted by free4now
The numbers reported in this thread are noticeably lower than the numbers reported in the "How much did you spend last year" thread:

http://early-retirement.org/forums/i...?topic=11335.0

I wonder if people are leaving lumpy expenses out of the numbers they report here, or if this thread somehow attracts more frugal folks.
The OP was asking about a modest lifestyle so won't get the it takes 200K to get by answers.

I plan to move when retire so won't be able to tell what my cost will be. I want to move to the country, have a well and septic tank so no public water and sewer and probably no internet, maybe no cable tv but added cost for raising pets like a pet steer and a pet hog and a bunch of pet chickens. My grandparent raised pet steers after retirement but they disposed of them every fall and got new ones in the spring so they didn't need to feed them all winter. I remember one named T-Bones, my parents stored him in their freezer. You can store pet hogs in the freezer too when you are tired of feeding them. Then you don't need to buy meat.
I think I could live on $2K per month in retirement plus whatever medical cost maybe 1K more so 36K or more for a single person. I hope to generate 40K in income before I retire.
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Re: Two people....what do you spend?
Old 03-25-2007, 03:50 AM   #50
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Re: Two people....what do you spend?

2 of us in the UK. No mortgage. No kids.

Holidays (vacations) $15,000
Football tickets $700
Gym subs $800
cds/books $1,000
Gifts $2,300
Other entertainments $2,000
Other insurance $1,800
Groceries $3,600
Petrol(Gasolene) $3,700
Car (auto) repairs/servicing $3,100
Meals out $1,300
Clothes $3,000
House maintenance repair $3,500
Cash/miscellaneous $6,200
Heating/utilities/phone $4,700
Broadband & Satellite TV $1,200

So I guess about $53,000 a year. Usually varies between $50,000 and $60,000.

I think its cheaper to live over there in the USA (apart from medical insurance which i don't fully understand)
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Re: Two people....what do you spend?
Old 03-25-2007, 06:26 AM   #51
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Re: Two people....what do you spend?

youbet, yes, if we did not have employer sponsored healthcare our expenses would be much higher. We had to stay in the workforce intentionally to keep it as DH has a cancer history (fortunately now cancer free x1.5 years and I need medication for a rheumatic condition).
Also, our house is paid for, but if we got in a pinch we could sell and downsize. We have a very nice house but could reduce taxes and save the difference in selling price if we moved to a less costly area. But our life and friends are here.

Old woman, I agree many spend more, I have figured our bare bones budget if we had to survive with no luxuries. We however plan on travel and hobbies and were willing to save more for those as well as stay in our house.

The only way to know your circumstances is to track and figure out your expenses.
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Re: Two people....what do you spend?
Old 03-25-2007, 08:52 AM   #52
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Re: Two people....what do you spend?

Quote:
Originally Posted by ashtondav
2 of us in the UK. No mortgage. No kids.

Holidays (vacations) $15,000
Football tickets $700
Gym subs $800
cds/books $1,000
Gifts $2,300
Other entertainments $2,000
Other insurance $1,800
Groceries $3,600
Petrol(Gasolene) $3,700
Car (auto) repairs/servicing $3,100
Meals out $1,300
Clothes $3,000
House maintenance repair $3,500
Cash/miscellaneous $6,200
Heating/utilities/phone $4,700
Broadband & Satellite TV $1,200

So I guess about $53,000 a year. Usually varies between $50,000 and $60,000.

I think its cheaper to live over there in the USA (apart from medical insurance which i don't fully understand)
You have $21,000 devoted to vacations, sports tickets, gifts, books/CDs, and other entertainment, and that doesn't even count your TV/internet fees. I don't think that's due to cost of living differences. Many of us spend very little in these categories because we are saving for retirement (less than $50 for me this year, to cover Bernstein's and Swedloe's books, vs $21,000.00 for you this year)

I am allowing a little extra in my retirement budget for entertainment. I'm most definitely not spending much on that sort of thing now. I'm at work most of the time anyway, right now so I don't have time to entertain myself THAT much. Right now I'm spending about $16,000 after taxes (very roughly figured, my earlier post being more accurate). In retirement, my target income is $24,000 after taxes, so I am thinking I will need about $35,000.
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Re: Two people....what do you spend?
Old 03-25-2007, 08:59 AM   #53
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Re: Two people....what do you spend?

Quote:
Originally Posted by savedapile
youbet, yes, if we did not have employer sponsored healthcare our expenses would be much higher. We had to stay in the workforce intentionally to keep it
That is what I'm doing right now. I could probably afford to retire a little bit earlier than three years from now, but I will get lifetime medical if I stay in the workforce until that time (so I will). In a way, this is a good thing because it will allow me to build up a little safety net before I make the plunge.
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Re: Two people....what do you spend?
Old 03-25-2007, 11:13 AM   #54
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Re: Two people....what do you spend?

I think there is a middle of the road here between bare bones and luxuries.I cannot imagine having to live on a third less post retirement . Don't most of the books recommend at least 80% of pre-retirement income.I'm retired and the only expense that has gone away is the saving for retirement .I now have more time to travel ,take courses and work on house projects ,all of which cost money . I'm living very nicely on $46,000.
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Re: Two people....what do you spend?
Old 03-25-2007, 11:46 AM   #55
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Re: Two people....what do you spend?

Generally, it seems like there is so much variation in (1) lifestyle choices, (2) terms and definitions and (3) non-monetary benefits, that I find it difficult to take any absolute numbers away from discussions like this. The discussions are still useful, however, in that ideas and concepts are raised that are very, very useful.

Lifestyle preferences are a huge variation. DW and I retired, in part, because we craved the time to travel and partake of leisure activities we had put off during our working lives. Without a hefty chunk of cash budgeted for vacations the first few years of RE, we probably wouldn't have RE'd. But that's just our choice and desire. We perfectly understand others lifestyle choices including a low cost, rural, self-sufficient life style. But, obviously, the lifestyle you chose is the predominant driver of your RE budget and what you want is what you want!

Terms and definitions seem to be all over the map. Some have said that the figures they stated are what it takes to cover only the minimum necessities. Others have included significant discretionary spending. Taxes, our single biggest expense, seem to be accounted differently by different posters. And on and on.

Non-monetary benefits and non-financial investments vary. Some have generous employer provided health care. Some have paid-for homes in good repair in low tax areas so housing costs (absent the opportunity cost of the money tied up in the house) are almost nil. Some have family situations, such as a parent-owned summer home, that will keep vacation costs minimal.

Bottom line........very interesting and worthwhile discussion but very difficult to walk away with an absolute number that's meaningful to compare against our own current budget/expenses. I'd advise OP to keep that in mind.


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Re: Two people....what do you spend?
Old 03-25-2007, 09:44 PM   #56
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Re: Two people....what do you spend?

Wow, I'm impressed with this Board......

I'm fairly new here, but I'm impressed that the topic I originally posted has produced so many replies (and is still on-topic )

Anybody else......?

Thanks for your help!
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Re: Two people....what do you spend?
Old 03-29-2007, 02:29 AM   #57
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Re: Two people....what do you spend?

We spend a net of $24K annually. We travel the world and have been doing so for 17 years.

Priceless Retirement: http://www.retireearlylifestyle.com/..._article_6.htm

We updated our figures as of end of 2006, and although our categories have shifted, the net annual spending came in at the same total.

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Re: Two people....what do you spend?
Old 03-29-2007, 03:52 AM   #58
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Re: Two people....what do you spend?

Quote:
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We spend a net of $24K annually. We travel the world and have been doing so for 17 years.
Akaisha,

If you and Billy started with an expense of $24k 17 years ago, how have you been able to maintain the same standard of living? I ask because of inflation. It seems to me certain expenses had to be adjusted. I know the CPI indexes are based on a basket of goods and services. Have you ever done a backward look at your expenses by category to see if you backed off on spending in certain areas and spent more in other areas throughout retirement
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Re: Two people....what do you spend?
Old 03-29-2007, 07:32 AM   #59
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Re: Two people....what do you spend?

Quote:
Originally Posted by tkp
Thanks so far to everyone who has responded.....

My wife and I think that we will probably need about $3000/month to cover our basic living expenses, including taxes and health insurance.

We also want to budget about $500 per month for travel and another $500 for "large ticket, not in budget" items like occasional car, new roof, etc.

So we are looking at about 4 grand per month, adjusted upwards with inflation. And then a (hopeful) raise when Social Security kicks in at 62 or 66.

Anyone else under similar circumstances want to weigh in? Any help is appreciated?

Thanks!
I'd suggest going over all your past bills for 1 year or so. Then adjust for post RE life.

Here's my budget for a single person.
Basic Living
House
(2,800) House RE Tax
(2,496) House HOA
(840) House Gas & Electric
(439) House Ins.
(300) House Misc Purchases
- Misc
(6,875) Subtotal House

Car
(204) Car Routine Maintance
(820) Car Ins
(132) Car Registration
(1,200) Car Gas
(2,356) Subtotal Car

Personal Expenses
(1,200) Cash - Misc
(420) Health Club
(322) Cell Phone
(1,980) Food
(420) Wine
(127) Blockbuster
(631) Telephone/Internet Access
(1,800) Dining Out/Entertainment
(2,376) Health Ins.
(360) Clothes
(96) Misc
(9,732) Subtotal Personal Expenses

(18,963) Total Basic Living
Incremental Living
(191) Travel Trailer Reg
(18,000) Travel/Education/Etc
(275) Hobby Membership
(1,152) Misc Hobbies
(906) Furniture Loan - No Interest
(513) Storage
(21,037) Total Incremental Living

(40,000) Total Basic + Incremental

Accruals
(500) Auto Repair
(2,000) Auto Replacement
(500) House Repair
(400) House Appliance Replacement
(1,400) Unexpected
(200) Computer Replacement
(5,000) Total Accruals

(45,000) Total Budget

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Re: Two people....what do you spend?
Old 03-29-2007, 07:10 PM   #60
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Re: Two people....what do you spend?

DW and I moved to our retirement home in Fla. the end of last year. I started tracking our expenses Jan 1st and we've been spending about 5K a month. Not sure of the taxes that have to be paid as of yet.
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